German Industry and Wholesale Hard-Pressed to Replace Sources of Supply for Goods from Russia and Ukraine
German companies are finding it difficult to replace imports from Russia, Ukraine, or Belarus, finds an ifo Institute survey. Only 13.8 percent of industrial companies with problems sourcing from these countries would be able to completely replace their sources of supply in the short term. For 43.4 percent, this is only partially possible. A further 16.3 percent answered that other sources of supply were not economically viable, and 13.8 percent stated that this was not possible at all.* “Changing sources of supply is a headache for many companies,” says ifo researcher Klaus Wohlrabe, adding that “supply chains and production processes that have been tried and tested for years often cannot be reorganized overnight.”
In wholesale, only 7.4 percent said it was entirely possible to find new sources of imports at short notice, while 42.0 percent said it was possible in some cases. A switch makes no economic sense for 16.0 percent, and is not possible at all for 17.3 percent.* Many companies are also indirectly affected because their own suppliers obtain imports from Russia. “There is also often uncertainty about whether and to what extent companies may be affected by the sanctions,” Wohlrabe says.
* “Don’t know” was selected by 12.7 of manufacturing companies and 17.3 percent of wholesalers.
